Friday, October 1, 2010

The Desirability of Incentives





Numerous surveys and studies have been conducted in the effort to identify which rewards people want "most". While the list below reflects the kinds of incentives people commonly say they want (which should indicate the rewards that elicit the greatest motivation), we've found that the effectiveness of rewards varies considerably.

Incentives in Order of Desirability
  • Travel
  • Brand name merchandise
  • Gift cards/Stored value cards
  • Recognition items
  • Cash
Cash or gift cards are easily understood and universally accepted. They have an immediate gratifying impact but little or no lasting trophy value. Travel sets high expectations, has a trophy and memory value and frequently enrolls spouses or others into the motivational process. Merchandise, both high and low value, allows each individual to set their own targets and has the longest sustained trophy value.
On the flip side, cash is quickly spent--often on routine bills--and quickly forgotten. Travel is only as good as the actual experience and merchandise can break, go out of fashion or reach a point of diminishing returns in the minds of recipients. The ideal program understands the stimulus and response value of each tool and incorporates many tools to account for the different psychological buttons they push. Similarly, a well constructed program offers enough enticing reward choices to encourage each individual to set their own preferences.

The Strengths of Non-Cash Programs
  • Motivate specific behavior
  • Build teamwork
  • Enable on-going measurement
    and insight
  • Establish a unique
    competitive advantage
  • Provide lasting trophy value and
    linkage to achievement
  • Improve teamwork
  • Improve administrative efficiency
  • Increase ROI and profitability
The Limitations of Cash Rewards
  • Salespeople earn commissions
  • Cash doesn’t add motivation
  • Cash pays routine bills
  • Cash has no trophy value
  • Cash is forgotten after it's spent and sustains little, if any, association with achievements

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